Elon Musk might’ve been late to the AI game, but he sure seems to have made up for lost time.
Elon Musk’s xAI has become the second most valuable AI startup in the world with a valuation of $80 billion. This puts xAI only behind OpenAI, which was last valued at $157 billion, and ahead of Anthropic, which was founded two years before xAI and is currently worth $61.5 billion.
“xAI has acquired X in an all-stock transaction,” Musk posted on X. “The combination values xAI at $80 billion and X at $33 billion ($45B less $12B debt),” he added.
“Since its founding two years ago, xAI has rapidly become one of the leading AI labs in the world, building models and data centers at unprecedented speed and scale. X is the digital town square where more than 600M active users go to find the real-time source of ground truth and, in the last two years, has been transformed into one of the most efficient companies in the world, positioning it to deliver scalable future growth,” he added.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach. The combined company will deliver smarter, more meaningful experiences to billions of people while staying true to our core mission of seeking truth and advancing knowledge. This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress,” he said.
AI labs have been scouring all manner of data to be able to train their models. Most companies have already used the entire internet, and many old books. Meta allegedly has also used pirated books — still under copyright — to train its models. But with such sources drying out, X could serve as a rich source of new data for xAI to train its models on. It has millions of users, who constantly keep adding new and real-time content to the platform. If xAI can exclusively get access to this content, its models could have a edge over those of other companies.
It’s this synergy that makes X and xAI a good match. It also explains why xAI is able to command the valuation it does, without even having generated any revenue like competitors like Anthropic and even DeepSeek. And it helps that xAI had recently released a very capable Grok model, which had zoomed to the top of the benchmark charts. Musk had played his part in starting off the AI revolution when he’d funded OpenAI in 2015 — lots has changed since then, but with his new AI venture now becomingthe second most valuable AI startup, he’s back to being a serious player in the AI race.